Title
BRYAN vs. HANKINS
Case
G.R. No. 18999
Decision Date
Nov 24, 1922
Plaintiff purchased unseaworthy vessel; court upheld rescission due to hidden defects, awarding partial refund after deducting for use, denying defendants' counterclaim.

Case Summary (G.R. No. 18999)

Relevant Transactions and Allegations

The agreed purchase price for the motor schooner was P55,000, of which the plaintiff paid P20,000 upfront. He executed two promissory notes amounting to P18,000 and P17,000 with maturity dates in April and July of the following year. Following the sale, the vessel was taken to Iloilo for inspection on March 11, 1921, revealing several unseaworthy conditions. The plaintiff contends that these defects existed at the time of delivery and that he would not have purchased the vessel had he known of them. He sought rescission of the sale, cancellation of the promissory notes, and recovery of the amount already paid.

Defendants' Response and Counterclaim

The defendants denied the allegations of hidden defects and counterclaimed for payment on the promissory notes, asserting that the plaintiff had repudiated his obligation to pay them. They contended the plaintiff should have raised his claim for hidden defects within the statutory period outlined in Article 342 of the Code of Commerce and argued that the plaintiff’s actions indicated a waiver of any implied warranty against hidden defects.

Trial Court's Rulings

The trial court found in favor of the plaintiff but only awarded him P10,000 instead of the P20,000 he sought. Both parties appealed; the defendants questioned the trial court's conclusion regarding unseaworthiness and the adjudication of hidden defects, while the plaintiff disputed the reduced award.

Material Condition of the Vessel

In reviewing the facts, the court established that an order for inspection of the vessel had been issued prior to completion of the sale. The defendants claimed the sale was contingent on the plaintiff's acceptance without inspection, which directly contradicted the circumstances of the transaction. The vessel’s subsequent inspection revealed significant structural issues, including dry rot, which contributed to its unseaworthiness and concealed the true nature of the vessel’s condition from the plaintiff.

Legal Framework: Code of Commerce and Civil Code

The defense referenced Article 342 of the Code of Commerce, which provides that failure to claim inherent defects within thirty days results in a loss of rights against the vendor. However, the court analyzed the applicability of this article, ultimately determining that as the plaintiff did not purchase the vessel for resale, the thirty-day limitation did not apply. Moreover, Article 1484 and Article

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